Buybacks

  • 29 Sep
    What Do Investments, Yields & Buybacks Tell Us?

    What Do Investments, Yields & Buybacks Tell Us?

    • The 10-year and 2-year treasury yield spread is getting smaller.
    • Investments peaked last year.
    • The market is standing on legs of hope coming from positive expectations. What are you standing on?

    Introduction

    We will take a look at yields, investments, buybacks and valuations, and look for trends that might trigger a bear market. More →

  • 05 Sep
    Do Your Future Returns A Favor

    Do Your Future Returns A Favor

    • S&P 500 companies are not only returning more cash to shareholders than their earnings, but also more than their cash flows.
    • The trend is resembling the one prior to the financial crisis.
    • Not all stocks are unsustainable with their cash returns, so check your portfolio.

    Introduction

    A common piece of financial advice is not to spend more than you earn as it will eventually put you in trouble. Well, this is exactly what corporate managers are doing. Through dividends and buybacks they are spending more than they are earning. If the common advice is of any value it should be trouble ahead for the stocks that are doing so.

    In this article we are going to analyze the situation, look at the real short and long term risks and conclude in fashion. More →

  • 27 Apr
    The Buyback Conundrum

    The Buyback Conundrum

    • Buybacks should increase shareholder value, but that’s not always the case.
    • From a book value perspective most companies are destroying value.
    • From a return on investment perspective the logic behind buybacks is open for discussion.

    Introduction

    The goal of investing is to enjoy stock price appreciation and dividends, but there is another method for achieving interesting returns: buybacks. With stock buybacks, a company buys its own stocks on the open market. As a public company cannot fully own itself, the purchased stocks lower the number of outstanding stocks and increase the relative ownership of the remaining stockholders. In other words, the company is using its cash to invest in itself. More →

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